Efficient utilization of employees in an organization is one of the most important keys for success of the organization. Significant challenges exist for those organizations that do not efficiently and effectively manage employee utilization and development. Presently, a lot of organizations with several thousand employees face the daunting task of managing competencies or skill set of the employees. For example, consider an Information Technology (IT) organization with thousands of employees across the globe with multi-disciplinary skill-set and cross-organizational distribution. With such a large employee base, it is imperative that the IT organization avails right competencies with right expertise-level at right time and at right location to fulfill organizational goals. To achieve this objective, the IT organization may resort to one or more measures, such as realigning the competencies possessed by the employees, relocating the employees with desired competencies to required locations, and cross-training the employees in order to achieve competencies that are needed for the fulfillment of the organizational goals. However, managing the training and deployment of such a large number of employees with multi-disciplinary skill-set and cross-organizational distribution is quite a daunting task.
Further, due to rapid changes that occur in the technology landscape and its applicability to address customer's needs, competencies of employees have to be regularly upgraded so that the employees can meet the ever-evolving customer expectations. For regular upgrade of competencies of several thousand employees, in accordance with organizational goals, there is a growing demand for Competency Management Tools.
In addition to meeting business requirements, Competency Management Tools can also help in career planning and employee retention. Specifically, in a fast changing competitive landscape, organizations are at the risk of losing core business capabilities and, subsequently, competitive advantage due to high employee attrition rates. Studies have shown that even employees reporting high satisfaction with workload, work environment and base salary are seven times more likely to consider changing employers when few opportunities for career growth exist. The American Society of Training and Development (ASTD) estimates that the cost to replace a professional is estimated to be 150% of the professionals annual salary, and the costs include the time required to find a replacement, recruiting fees, vacancy costs, productivity losses, and training.